Supreme Court clarifies Time-Bound Promotion Scheme for Electricians: Institute of Chartered Accountants of India vs. J.R. William Singh (24 January 2020)

Date of the Judgment: 24 January 2020
Citation: Civil Appeal No. 200 of 2020
Judges: Ashok Bhushan, J., M. R. Shah, J.
Can an employee, specifically an electrician, claim a time-bound promotion to a higher post, like Section Officer, even if the initial employment agreement and subsequent decisions specified that they were only entitled to the next grade pay scale? The Supreme Court of India addressed this question in a case involving the Institute of Chartered Accountants of India (ICAI) and one of its employees, J.R. William Singh. The court examined the nuances of time-bound promotion schemes and their applicability to specific categories of employees. The judgment was delivered by a two-judge bench comprising Justice Ashok Bhushan and Justice M. R. Shah, with Justice M.R. Shah authoring the opinion.

Case Background

The respondent, J.R. William Singh, was initially appointed as an Electrician by the Institute of Chartered Accountants of India (ICAI) on 26 February 1974. His position was confirmed on 16 April 1976. Over the years, he received regular increments. A settlement was reached on 10 January 1984, between the ICAI and its Employees’ Association, introducing a Time-Bound Promotion Scheme (TBPS) for certain employee categories. However, this scheme did not explicitly include positions like Electrician. A subsequent decision by the President of ICAI on 25 February 1984, clarified that employees like Electricians were only entitled to the next grade pay scale, not a promotion to a higher post like Section Officer. Despite this, the respondent was given the benefit of enhancement in the salary in the next grade.

Later, on 8 July 1986, the respondent’s pay scale was revised to a higher scale after completing 12 years of service. In 1988 and 1991, further settlements were made, which reduced the time span for promotions under the TBPS. In 1995, the respondent requested a promotion under the TBPS, claiming that he was eligible for promotion to the post of Section Officer on 5 March 1993, after completing seven years of service. This request was denied, citing the 1984 settlement and the President’s decision. The respondent was transferred to the Diary/Dispatch Section in 1996 and later to HRD (Noida) in 2004, but his designation remained Electrician. His repeated requests for promotion to Section Officer were rejected, leading him to file a writ petition before the High Court of Delhi.

Timeline:

Course of Proceedings

The respondent initially filed a writ petition before the High Court of Delhi, seeking promotion to the posts of Section Officer and Executive Officer, along with the quashing of his transfer orders. The learned Single Judge of the High Court dismissed the writ petition on 2 April 2018. Aggrieved by this decision, the respondent appealed to the Division Bench of the High Court. The Division Bench, in its judgment dated 5 February 2019, allowed the appeal, quashing the Single Judge’s order. The Division Bench directed the ICAI to grant the respondent the pay scale and designation of Section Officer with effect from 5 March 1993, and that of Executive Officer with effect from 5 March 2002, under the TBPS, along with arrears of salary. This order of the Division Bench was challenged by the ICAI before the Supreme Court.

Legal Framework

The core legal issue revolves around the interpretation and application of the Time-Bound Promotion Scheme (TBPS) as agreed upon in various settlements between the Institute of Chartered Accountants of India (ICAI) and its Employees’ Association. The initial settlement of 10 January 1984, introduced the TBPS, but Clause 1(v) stated that cases of employees like Jamadar, Drivers, and Electricians would be decided by the President of ICAI. The President’s decision on 25 February 1984, clarified that these employees were entitled only to the next grade pay scale, not a promotion to a higher post. Subsequent settlements on 2 August 1988, and 15 June 1991, reduced the time gap for promotions under the TBPS but did not explicitly alter the exclusion of certain categories of employees from promotions to higher posts.

The key legal provisions and agreements are:

• Settlement dated 10 January 1984: This agreement introduced the Time-Bound Promotion Scheme (TBPS) for Class III and Class IV employees of ICAI. Clause 1(v) of this settlement stated: “the decision in respect of cases not falling under the two broad categories referred to hereinabove, e.g. Jamadar, Drivers, Gestetner Operators, Electricians, Electrical Foreman and Library Attendant will be taken up by the President.”
• Decision of the President of ICAI dated 25 February 1984: This decision stated that employees like Jamadars, Drivers, and Electricians, as mentioned in Clause 1(v) of the settlement dated 10 January 1984, would only be entitled to the next grade.
• Settlement dated 2 August 1988: This settlement reduced the time gap for promotions under the TBPS, but it also stated that “all other terms and conditions relating to the TBPS, as contained in the settlement/agreement dated 10.01.1984, shall remain in force and be applicable during the period of the said agreement.”
• Settlement dated 15 June 1991: This settlement further reduced the time gap for promotions under the TBPS.

Arguments

Appellant (ICAI) Arguments:

• The High Court erred in directing the promotion of the respondent to the post of Section Officer under the TBPS.
• The respondent, being an Electrician, was not entitled to time-bound promotion as per the settlement dated 10 January 1984, specifically Clause 1(v), and the President’s decision dated 25 February 1984.
• There was no promotional channel from the post of Electrician to Section Officer.
• The High Court incorrectly relied on subsequent settlements dated 2 August 1988, and 15 June 1991, as the settlement dated 2 August 1988, specifically stated that the earlier settlement dated 10 January 1984, would continue to be applicable.
• The respondent was only entitled to the next higher pay scale, which he received from time to time.
• The respondent’s temporary work in the Diary/Dispatch Section as a Section Officer did not constitute a promotion.
• There is a clear distinction between the policies applicable to Class III and Class IV employees and other employees like Electricians, who were specifically excluded from the TBPS.

Respondent (J.R. William Singh) Arguments:

• The Division Bench of the High Court was correct in directing the appellant to grant promotion under the TBPS.
• The President’s order dated 25 February 1984, was not communicated to the respondent and was not binding on him.
• Subsequent settlements dated 2 August 1988, and 15 June 1991, did not exclude the post of Electrician from time-bound promotions.
• The respondent was appointed as a Section Officer in the Diary/Dispatch Section and was also given the pay scale of Assistant, entitling him to promotion to the next post of Section Officer under the TBPS.
• If the appellant’s submission is accepted, it would lead to stagnation, which is against the policy of time-bound promotion.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was whether the respondent, an Electrician, was entitled to promotion to the post of Section Officer under the Time-Bound Promotion Scheme (TBPS), given the initial settlement dated 10 January 1984, and subsequent settlements.

The sub-issue was whether the subsequent settlements dated 2 August 1988 and 15 June 1991, altered the exclusion of certain categories of employees from promotions to higher posts under the TBPS, as specified in the initial settlement of 1984.

Treatment of the Issue by the Court

Authorities

The Supreme Court primarily relied on the interpretation of the settlement agreements between the ICAI and its Employees’ Association, particularly:

• Settlement dated 10 January 1984: The court emphasized Clause 1(v) of this settlement, which stipulated that the President would decide on cases of employees like Electricians.
• Decision of the President of ICAI dated 25 February 1984: The court noted that this decision clarified that employees like Electricians were only entitled to the next grade pay scale, not a promotion.
• Settlement dated 2 August 1988: The court highlighted that this settlement explicitly stated that all other terms and conditions of the 1984 settlement would remain in force, except for the reduced time gap for promotion.
• Settlement dated 15 June 1991: The court noted that this settlement further reduced the time gap for promotions under the TBPS.

Judgment

How each authority was viewed by the Court?

• The settlement dated 10 January 1984 was viewed as the foundational document that established the TBPS, with Clause 1(v) specifically addressing the exclusion of certain categories of employees.
• The decision of the President of ICAI dated 25 February 1984 was viewed as a valid clarification of Clause 1(v) of the 1984 settlement, which specified that employees like Electricians were only entitled to the next grade pay scale, not a promotion.
• The settlement dated 2 August 1988 was viewed as a continuation of the 1984 settlement, with the only change being the reduction in the time gap for promotions.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the explicit terms of the settlement agreements between the ICAI and its Employees’ Association, particularly the initial settlement of 10 January 1984, and the subsequent decision of the President of ICAI. The court emphasized that the terms of the settlement, specifically Clause 1(v), and the President’s decision clearly stated that employees like Electricians were not entitled to promotion to higher posts under the TBPS but were only entitled to the next grade pay scale. The court also noted that the subsequent settlements did not alter this exclusion, as the settlement of 2 August 1988, explicitly stated that the terms of the 1984 settlement would continue to apply. The court also considered that the respondent was bound by the settlement as a member of the Employees’ Association. The court was also influenced by the fact that the respondent was given the next higher grade as per the decision of the President dated 25 February 1984.

The Court rejected the argument that the respondent was entitled to promotion under the TBPS, stating that the initial exclusion of Electricians was not altered by subsequent settlements. The Court also rejected the argument that the President’s order was not binding on the respondent. The Court held that the respondent was bound by the settlement as a member of the Employees’ Association. The Court, however, acknowledged that the respondent had worked as a Section Officer for some time and was entitled to the salary of that post for the period served.

The Supreme Court noted that the High Court had misread and misinterpreted the settlement dated 02.08.1988, particularly paragraph 17 of the impugned judgment. The Court stated that the High Court had failed to appreciate that the subsequent settlement of 02.08.1988, did not alter the terms of the settlement dated 10.01.1984, except for the time gap for promotion.

The Court observed that, “in the memorandum of settlement dated 02.08.1988 it has been specifically provided and so stated that except for and subject to the changes made by the said settlement, namely, reduction of time period for getting the promotion under the TBPS, all other terms and conditions relating to the TBPS, as contained in the settlement/agreement dated 10.01.1984, shall remain in force and be applicable during the period of the said agreement.”

The Court further noted that, “being an Electrician, the respondent was already given the pay-scale of an Assistant as per the decision of the President dated 25.02.1984, which was as per Clause 1(v) of the memorandum of settlement dated 10.01.1984.”

The court also observed that, “merely because an employee is given a temporary charge to do a particular work of a particular post, it cannot be said that in fact he has been promoted to the said post.”

The Court stated that the High Court had committed a grave error in directing the appellant to promote the respondent to the post of Section Officer under the TBPS.

The court clarified that the TBPS is intended to remove stagnation at the workplace. However, the promotion shall be governed as per the promotion scheme only. The Court noted that the respondent was already given the next higher grade as per the decision of the President dated 25.02.1984.

The Court held that the respondent was entitled to the same salary as a Section Officer for the period during which he worked as a Section Officer, if not already paid.

Key Takeaways

• Employees are bound by the terms of settlement agreements made between their employer and the Employees’ Association.
• Time-Bound Promotion Schemes (TBPS) must be interpreted strictly according to their terms and conditions.
• Subsequent settlements that do not explicitly alter the terms of previous agreements will not be considered to have changed the original terms.
• Employees in specific categories can be excluded from certain benefits of a TBPS if the initial agreement and subsequent decisions clearly state so.
• Temporary charge of a higher post does not constitute a promotion to that post.

Directions

The Supreme Court directed the appellant to pay the respondent the same salary as a Section Officer for the period during which he worked as a Section Officer, if not already paid.

Development of Law

The ratio decidendi of this case is that the terms of settlement agreements, particularly those related to promotion schemes, must be interpreted strictly. The case clarifies that subsequent agreements do not alter the terms of previous agreements unless explicitly stated. This judgment reinforces the principle that employees are bound by the agreements made between their employer and their association, and that temporary assignments do not constitute promotions. This case clarifies that the initial exclusion of certain categories of employees from promotions under a TBPS remains valid unless specifically altered by subsequent agreements.

Conclusion

The Supreme Court allowed the appeal of the Institute of Chartered Accountants of India, setting aside the High Court’s order to promote the respondent to the post of Section Officer under the TBPS. The court held that the respondent, being an Electrician, was not entitled to promotion under the TBPS as per the initial settlement and the President’s decision, and that subsequent settlements did not alter this exclusion. However, the court directed the appellant to pay the respondent the same salary as a Section Officer for the period during which he worked as a Section Officer, if not already paid. The judgment emphasizes the importance of adhering to the terms of settlement agreements and clarifies that temporary assignments do not constitute promotions.

This case clarifies the interpretation of time-bound promotion schemes and their applicability to specific categories of employees, underscoring the importance of clear and explicit terms in settlement agreements. It also highlights the binding nature of agreements on employee associations and their members.